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Hi, I need a bit of help... I just got a job, basically it's transcribing college lectures for deaf / hard of hearing students. George Brown is in charge of it (I invoice them), but I go to different colleges. It is a part time job, not a career or anything, but I like the job and plan to keep it for a while. I'm living at home with my mom (if that makes a difference).

I was hired through a staffing agency (Manpower) which pays me. They take off quite a bit of deductions, around $100ish per cheque. If say I was to invoice for $550, they would add $20 for vacation pay, subtract $80ish for federal tax, $25ish for CPP, $10ish for EI, leaving me with $460ish.

I have the option of giving them a GST number (I would obviously have to get one first), so that way they don't take anything off, but I would have to file my taxes through that GST # and pay them on tax time. Should I do this? I know that if I do that I can write off expenses, can I still write off some stuff (gas, computer parts, car repairs maybe, etc) when I do my taxes if I'm just paid normally or only if I do that GST number thing? Will I still get the vacation pay? Will I pay less taxes overall with the GST number thing, or should I just not bother? Any advice would be great.

And also, about EI, I talked to someone who does it through a GST number and she doesn't pay EI. Obviously, she is not eligible for EI then since she doesn't contribute to it. However, can anyone clarify how EI works? Like I have my schedule and everything for this semester... they still need people like me in the summer due to summer classes, but obviously they need less, so I'm not sure if I will or will not have employment in the summer (it would resume in September, though) or if maybe I just get much less hours. So....if I can't work in the summer since they don't need me, can I claim EI for that? If so then maybe it would just make sense not to save on taxes since EI would be beneficial.

I'm not an expert on personal taxes...I know just enough to cause a bit of trouble. Here are the general rules,

In order to have Manpower not deduct taxes the relationship needs to be employer/independent contractor. being recognized as independant contractor is a question of fact.

CRA uses test to determine employer/employee vs independent contractor. These test include things like are you dependant on one source of income or do you have many contracts. Also they look at whether you own your tools of trade. (ie all the transcribing occurs on equipment purchased by you, you are not provided a computer etc.)

There are a few other tests but I've forgotten them. you do not need to register for GST unless your taxable services being offered exceed 30,000. I would not recommend registering for GST unless you are required to, gst compliance can be over burdening. and there is limited benefit.

if you want to lower your personal income tax register a sole proprietorship. or as corporation... but as a corporation there is double taxation when you rec. salaries from your corp (first the corporation pays tax on income earned then you pay tax on the salaries your corporation paid you), however you can take out just over 30k through dividends to avoid the double tax.

I would register a business (sole proprietor) and if manpower agrees have them contract out the work to your business instead of you directly.